BofA Sells Asia PE Assets To Paul Capital Consortium

Bank of America Merrill Lynch has agreed to sell its Asia non-real estate private equity portfolio to a consortium of four private equity firms headed by Paul Capital, according to sources familiar with the matter, sister news service Reuters reported.

The consortium is using the portfolio, which holds around 20 assets largely acquired by Merrill Lynch, to form a new private equity manager, NewQuest Capital Partners, which will focus on investment opportunities in Asia. The new fund will be called NewQuest Asia Fund I LP, according to a statement issued by NewQuest on Monday.

Sources familiar with the matter said Newquest has commitments worth $400 million. The sources declined to be identified as the size of the portfolio was not made public.

The other consortium members are HarbourVest Partners Asia, LGT Capital Partners and Axiom Asia, the statement added.

The four-member NewQuest team, all former Bank of America Merrill Lynch employees, is led by managing partner Darren Massara, with Amit Gupta, Bonnie Lo and Min Lin as partners.

Secondary equity specialist Paul Capital plans to grow its presence in Asia through the new fund. Secondary equity firms occupy a niche position in private equity, buying existing commitments to PE and alternative investment funds.

The acquired portfolio consists of growth-equity and buyout interests primarily in domestically-focused Chinese and Indian companies. The fund will also have capital reserved to make new and follow-on investments with an emphasis on the purchase of direct secondary equity positions in Asia.

Founded in 1991, Paul Capital manages $4.6 billion in capital commitments in its secondary private equity program. The firm has offices in Hong Kong, London, New York, Paris, San Francisco and Sao Paulo. Paul Capital secondary funds have completed more than 175 secondary market acquisitions of limited partnership interests and portfolios of direct private equity investments.

Stephen Aldred is a Hong Kong-based Reuters correspondent.